KEY STEPS

Compendium on methods and tools to evaluate impacts of, and vulnerability and adaptation to, climate
change

Handbook for Estimating the Socio-Economic and Environmental Effects of
Disasters

Description

One of the problems following disasters is that damaged areas are often reconstructed quickly and
without adequate resources. The result is that vulnerability is reconstructed rather than reduced.
This tool helps to assess the direct and indirect socio-economic impacts of disasters, and to
identify the most affected areas and priority areas for recovery. It outlines the conceptual and
general methodological aspects of estimating the asset damage, losses in the flows of goods and
services, as well as any effects on the macroeconomy. The handbook is divided into five sections:

Methodological and conceptual framework;

Assessing impacts in social sectors;

Assessing impacts on infrastructure;

Assessing impacts in economic sectors;

Assessing impacts in cross-sectoral areas, such as the environment, gender, and employment.

Appropriate Use

This type of assessment should follow the emergency phase of a man-made or natural disaster, so it
will not interfere with urgent humanitarian activities. Sufficient quantitative information on
damages is also more likely to be available after that period. The tool is good for organizations
that want to understand a wider range of disaster risks. By assessing the direct and longer-term
indirect socio-economic impacts, organizations then have a better idea of how to reduce the risks
in future programs that may have development or environmental goals.

The tool can be adapted to comprehensively assess socio-economic impacts of climate change.
Sections 2-5 include a definition of the sector, an overview of likely direct and indirect damages,
the quantitative and qualitative information needed, possible information sources, general
instructions on analyzing the data, and issues to consider in assessing macroeconomic impacts
arising from damages in that sector. It is not a step-by-step guide, but rather gives an overview
of general steps to be taken in each assessment.

Scope

National or sub-national level; sectoral.

Key Output

A measurement, summarized in table form and in monetary terms where possible, of the impacts of
disasters on the society, economy and environment of the affected country or region. Results are
divided into direct, indirect and macroeconomic effects (employment, the balance of payments,
public finances, and prices and inflation).

The disaster may also have benefits, so the assessment refers to the net effect. The assessment
identifies the key geographical areas and sectors affected, together with corresponding
reconstruction priorities. It can provide a way to estimate the country’s capacity to
undertake reconstruction on its own and the extent to which financial and technical cooperation are
needed. For the longer term, it may identify the public policy changes and development programs to
address these needs.

Key Input

Quantitative and qualitative information on conditions both before and following the disaster. The
assessment team must decide on the balance between precision and speed in conducting the assessment.
“Shadow prices” may be used to try to take into account the indirect effects and
externalities of disasters.

Ease of Use

Experience with economic valuation and assessing damage in specific sectors required. The use of
market vs. social prices will depend on the availability of information and time to conduct the
assessment.